The Florida Bar Foundation said it has received $3.6 million of the $4.3 million in sanctions from two law firms involved in tobacco litigation and plans to disburse it to qualified legal aid organizations in the Middle District of Florida.

The money, allocated by a panel of federal judges overseeing long-running tobacco litigation, came from sanctions against The Wilner Firm PA and Farah & Farah PA, which were found to have filed and maintained at least 1,250 baseless Engle progeny tobacco lawsuits.

The Florida Bar Foundation said Monday that the funds will be used to promote "robust, professional, ethical and competent representation of low-income Floridians" through grants to legal aid organizations in the Middle District of Florida, which encompasses Jacksonville, Orlando, Ocala, Tampa and Fort Myers.

The funds will be allocated roughly in proportion to the number of Engle progeny cases that came from each division of the Middle District, according to a Feb. 6 order directing the money to the foundation. Sixty percent of the funds will go to legal aid organizations in the Jacksonville area, while Orlando and Ocala will get 22 percent, according to the order. Organizations in the Tampa division will receive 15 percent and Fort Myers will get 3 percent.

Jessica Brown, a spokeswoman for the Florida Bar Foundation, said this type of arrangement, where sanctions fund legal aid, is very rare. In 2016-17, the foundation allocated nearly $11.5 million in grants and related activities, so $3.6 million represents a significant percentage of the foundation's budget, Brown said.

"This order represents a monumental act which promotes the very principles of our democracy and the aspirations of our justice system," Florida Bar Foundation Executive Director Donny MacKenzie said. "The court is setting an admirable example of how fiscal sanctions can be used in unique situations such as this to promote professionalism, ethical representation and increase access to justice."

The rest of the funds from the sanctions went to the U.S. Attorney for the Middle District of Florida, which had requested $435,000 as reimbursement for the office's role as special master during the sanctions litigation, and to the Florida Bar's Henry Latimer Center for Professionalism, which received $400,000 to develop and maintain long-term professionalism and ethics programming for Florida law schools.

U.S. District Judge Roy B. Dalton Jr., who was on the panel that oversaw the sanctions, mentioned them at an event last week in which he was honored for his work establishing resources for pro se litigants, calling it a case of turning lemons into lemonade.

"The U.S. district court recently had the unpleasant task of imposing sanctions on lawyers in connection with the massive volume of tobacco litigation," he said. "It is true that out of challenge springs opportunity."

The panel initially sanctioned The Wilner Firm and Farah & Farah $9.1 million in October 2017 for maintaining at least 1,250 groundless Engle progeny tobacco lawsuits. In the order, the judges said the sanctions were potentially unprecedented, but they called the firms' actions equally unprecedented and admonished the firms for their "immense waste of judicial resources and contempt shown for the judicial process."

The Wilner Firm and Farah & Farah had originally filed approximately 3,700 cases in 2008 in the wake of the Florida Supreme Court's 2006 ruling decertifying the Engle class of smokers and overturning its historic 1996 verdict awarding damages of $145 billion against several tobacco companies, according to court documents.

The high court's ruling allowed up to 700,000 class members to sue individually using the jury's findings of liability, and the litigation has since been winding its way through Florida's courts.

In 2011, The Wilner Firm objected to questionnaires being sent to the 2,900 remaining plaintiffs, arguing the firm had "ongoing and routine communications" with nearly all of the plaintiffs and any data would not result in a significant reduction in the number of pending cases.

But in September 2014, the Eleventh Circuit affirmed the dismissal of hundreds of those cases, which the district court found to be ridden with errors. They also included more than 500 personal injury complaints filed on behalf of people who had already died and sought relief for "survivors" of living individuals.

Although the tobacco companies had filed a sanctions motion in 2012 regarding the filings on behalf of deceased plaintiffs, they agreed to withdraw the motion following the $100 million settlement of the remaining cases in 2015. The court, however, over The Wilner Firm and Farah & Farah's objection, appointed the U.S. attorney for the Middle District of Florida as a special master to investigate whether their conduct warranted sanctions.

After the investigation, the court sanctioned the firms $9.1 million for their litigation tactics. But the panel agreed in July to reduce the sanctions to $4.3 million in order to resolve a dispute over attorneys' fees and allow the litigation to "run its tortured course" and come to a conclusion.

--Additional reporting by Dorothy Atkins. Editing by Nicole Bleier.